The inquiry we hear the most from people is “do I qualify for chapter 7 bankruptcy?” The new bankruptcy laws have adjusted who is eligible to file personal bankruptcy to prevent people from taking advantage of the system. Curious if you qualify for ch 7?

Individual – In order to file ch 7, you have to be an individual, businesses are not eligible. You can be married or single. You can file with your spouse or without them. Your spouse’s income will have to be considered even if you are not filing together in order to see if you qualify for chapter 7.

Income – Chapter 7 filers must complete a means test that takes your income and expenses into account to determine if you are able to pay a portion of your debt. You are eligible for a chapter 7 if your income is below the state median for a family of your size.

If your income is above the median you may still qualify for ch 7 by providing supplemental information on your expenses to determine your disposable income. The means test will then compare your living expenses to the IRS standard allowances that have been set for where you live. You may also be able to include extraordinary expenses you may have due to medical and other conditions that will have to be explained to the bankruptcy court.

If your disposable income is lower than $6000 you qualify for ch 7, if it’s more than $10,000 you do not qualify for chapter 7 bankruptcy. If your leftover income is between $6000-$10,000 then you have to determine if you can pay at least 25% of your unsecured debt, if you can’t then you can file ch7. As you can see, the means test is confusing if you have disposable income because your income is higher than the median, so you should discuss your eligibility with a bankruptcy attorney.

Guest Article Provided By: BankruptcyFormProcessing.com where you can find bankruptcy information for chapter 7 and 13, and DoItYourselfBankruptcyForms.com where you can find free bankruptcy forms online.